Ezel / IRS Rulings / 201005044

CCA 201005044: An FPAA establishes loan treatment before partner-level adjustments

Number
201005044
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Coordination with Deficiency Proceedings
Topics
Procedure, penalties, and administration
Code sections
§ 6230
Ruling dated
January 12, 2010
Publicly released
February 5, 2010
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

This internal IRS Chief Counsel advice addresses the treatment of a loan to a partnership in a TEFRA proceeding. It says an FPAA must be issued to the partnership to establish the treatment of the loan. Once that treatment is established, conforming computational adjustments may be made to the partners, including disallowing a bad-debt deduction claimed by the partner that made the loan. An affected-item notice is required only if additional partner-level determinations are needed to make the assessment.

Ruling snapshot

  • Question: What proceeding establishes the treatment of a partnership loan, and when is an affected-item notice required?
  • Outcome: Advice given.
  • Key authorities: IRC § 6230 and the TEFRA partnership procedures.

Full text (IRS public release)

ID: CCA_2010011208493437 Number: 201005044
Release Date: 2/5/2010
Office: ----------
UILC: 6230.01-00

From: -------------------
Sent: Tuesday, January 12, 2010 8:49:36 AM
To: --------------------
Cc: ----------------------------------
Subject: RE: TEFRA Question

I agree that we must issue an FPAA to Y partnership to establish the treatment of any loan to Y. Once that treatment is established in a TEFRA proceeding, conforming computational adjustments may be made to the partners, including the disallowance of any bad debt deduction claimed by the partner that loaned money to Y. An affected item notice would only be required to make this assessment if additional partner-level determinations are required to make the assessment.

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